elook Factory Overhead Cost Variances The following data relate to factory overh

Question

elook Factory Overhead Cost Variances The following data relate to factory overhead cost for the production of 6,000 computers Actual: Variable factory overhead 264,800 75,000 318,000 Fixed factory overhead Standard: 6,000 hrs at $53.00 If productive capacity of 100% was 10,000 hours and the factory overhead cost budgeted at the leve of 6,000 standard floxed factory overhead volume variance, and total factory overhead cost varlance sign and an unfavorable variance as a positive number Varlance Controllable varlance hours was $348,000, determine the variable factory overhead Controllable Varlancse a . The fxed factory overheed rate was $7.50 per hour. Enter a fevorable variance as a negative number using a minus Amount Favorable/Unfavorable Volume variance Total factory overhead cost variance:

Explanation / Answer

1)Variable overhead Controllable variance : Actual overhead -standard cost for actual output

             = 264800 - 273000

              = - -8200 F

**Fixed budgeted overhead :10000 budgeted hours *7.5fixed factory overhead

                            75000

Variable overhead for standard hours :348000-75000 = 273000

2)VOlume variance: Fixed factory overhead rate [Budgeted hours -standard hours]

             = 7.5[10000-6000]

               = 30000 U

3)Total factory overhead cost variance :Actual overhead - standard overhead

                           [264800+75000]- 348000

                             339800-348000

                             = -8200 F

                          

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